If the LRATC curve is falling, then
A)the law of diminishing marginal returns is operating.
B)economies of scale are present.
C)constant returns to scale are present.
D)diseconomies of scale are present.

Question

Quizplus · Accepted Answer

When the Long-Run Average Total Cost (LRATC) curve is falling, it indicates that the firm is experiencing economies of scale, meaning that as the scale of production increases, the average cost of producing each unit decreases. This is due to factors such as increased efficiency, better utilization of resources, and spreading of fixed costs over a larger number of units.

If the LRATC Curve Is Falling, Then